Special Needs Trusts

If you have a disabled loved one- especially if you are the parent of a child with special needs- you already know that you need to educate yourself about the ins and outs of government benefits that he or she receives.  Yet equally importantly, you’ll want to learn about the planning options available to ensure that this person not only receives needed benefits, but also that you, your family, and your loved one are all still able to spend your own money pay for care and services that improve your loved one’s quality of life.

If you have a loved one who might benefit from a Special Needs Trust, I can help you establish and properly manage such a trust.    -Paul

What are special needs trusts?

A trust is created when property (real estate, finances, tangible items) is managed by a person for another person’s benefit. The person managing the property is called the “trustee”. The person whose benefit it is for is called the “beneficiary”. The trust lasts as long as it is needed. This usually means the trust will go on until the beneficiary’s death or until the funds are exhausted.

Special needs trusts are made specifically for the benefit of disabled or mentally ill beneficiaries. These beneficiaries lack the mental capacity to manage their own finances. The trust is created with the specific needs, lifestyle, and future of the beneficiary in mind. Often times these special needs trusts are used to ensure that the beneficiaries don’t lose government benefits they are receiving. The trustees of special needs trusts can be family members or, if an appropriate and trustworthy family member is unavailable, a third party will be appointed by the court. Choosing the right trustee must be done very carefully, especially for special needs trusts that are used for the benefit of a younger person.

What are the benefits of special needs trusts?

People with disabilities often qualify for government assistance such as Supplemental Security Income (SSI), Medicaid, vocational rehabilitation, and subsidized housing. Many people make the mistake of leaving assets to their disabled loved ones through a will. This is problematic because acquiring assets, such as a lump sum of money, can disqualify your loved one for these types of government assistance programs. By setting up a special needs trust, instead of solely using a will, you can avoid these issues. Because the trustee has total control over the management of the funds, and the beneficiary does not, government program administrators, like the ones from SSI and Medicaid, ignore the trust assets when considering eligibility.

Special needs trusts can also be used to set up inheritance funds or proceeds from a settlement on behalf of the disabled person. This way, if your loved one is the plaintiff in a successful lawsuit or inherits assets, those funds will go into the trust and will not disqualify him or her from receiving those government benefits. On the flip side, if the beneficiary is ever sued, the funds in his or her special needs trust cannot be touched—they are not subject to any judgment.

What if we are not concerned with government benefits?

The beauty of special needs trusts is that they address the specific needs of the disabled person, whereas, other types of trusts do not. Even if a family is not interested in government benefits, they should still consider a special needs trust to address those specific needs. Furthermore, you never know what the future holds. There is no sense in sacrificing government services that could be beneficial for your disabled loved one in the future.

How can the beneficiary access the special needs trust?

Having the trustee directly give your loved one money could disqualify him or her for government benefits. Instead, the trustee can use the trust assets to purchase necessities for your loved one. The trustee can buy services and products, like personal care attendants, vacations, home furnishings, medical and dental expenses, education, vehicles, physical therapy, and even recreation.

Our family is wealthy. Do we still need to create a Special Needs Trust?

Yes.  You should still establish a Special Needs Trust to protect your disabled loved one from potential creditors.  If, for example, your disabled beneficiaries are ever sued in a personal injury action, the assets in the trust would not be available to the plaintiffs.    Furthermore, because the funds in a Special Needs Trust are not countable as available assets for purposes of determining government benefit eligibility, more of your money can be used for those supplemental expenditures that will allow your disabled beneficiary to enjoy a higher quality of life.  Otherwise, many of your assets will be used to pay for private care benefits that are extremely expensive and can drain even significant sums of money over a period of years.

How I can help:

The special needs planning aspect of my law practice is focused upon helping Georgia residents who receive SSI & Medicaid.  I have helped such individuals defend their benefits in Fair Hearing situations.  I also help families who want to be able to spend additional money to improve their disabled child or family member’s quality of life.  To learn more, read Special Needs Planning- An Overview.


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